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Macy's Turnaround: Closing Underperforming Stores to Boost Profitability

AInvestFriday, Jan 10, 2025 3:57 pm ET
4min read


Macy's, Inc. (NYSE: M) is taking a bold step in its ongoing turnaround attempt by announcing the closure of 66 underperforming stores as part of its "Bold New Chapter" strategy. This move, which is part of the retailer's plan to shutter 150 locations by 2026, aims to focus resources on more profitable locations and improve the company's overall financial health.

The decision to close these stores comes as Macy's struggles to keep up with changing consumer habits and increasing competition from online retailers and off-price competitors. By closing underperforming stores, Macy's can reduce expenses associated with these locations, such as rent, utilities, and staffing, and reinvest those resources in more profitable stores and online platforms.

Macy's CEO Tony Spring stated that the closures are part of the company's effort to become a more profitable entity. "The closures are part of the struggling retailer’s 'Bold New Chapter' plan to shutter 150 locations through 2026. Spring said that the initiative 'gets us even closer to... becoming a more profitable Macy’s, Inc.'"

The stores slated for closure are spread across 22 states, with California, Florida, New York, and Texas being the most affected. The full list of closing locations includes a mix of Macy's department stores, Macy's Furniture Galleries, and Macy's Backstage stores. Liquidation sales will begin in the coming days, and some stores have already closed.

Macy's is not the only retailer struggling to adapt to the changing retail landscape. Many other department stores and brick-and-mortar retailers have been forced to close stores or file for bankruptcy as consumers shift their spending habits towards online platforms and off-price retailers. However, Macy's is taking a proactive approach by focusing on its most profitable locations and investing in its online presence to better compete with these competitors.

In addition to closing underperforming stores, Macy's is implementing several strategies to retain and attract customers in the remaining stores and online platforms. These strategies include expanding its private label and exclusive brand offerings, accelerating luxury growth, improving product offerings and service, investing in technology, and offering loyalty programs and rewards. By focusing on these key areas, Macy's aims to better compete with online retailers and off-price competitors and return the brand to its former glory.




In conclusion, Macy's turnaround attempt is focused on closing underperforming stores and investing in more profitable locations and online platforms. By taking these steps, Macy's aims to improve its overall profitability and better compete with online retailers and off-price competitors. While the short-term impact of the closures may include a decrease in revenue, the long-term goal is to become a more profitable company by concentrating on better-performing locations. As the retail landscape continues to evolve, Macy's is taking a proactive approach to ensure its survival and success.
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